"Recruitment agency", "staffing agency", "labour hire", "temp agency" — businesses use these interchangeably, and then get surprised when the invoice, the paperwork and the flexibility all look different from what they expected.
Here's the honest version. Labour hire and recruitment are two different services that solve two different problems. Most businesses need one of them most of the time, and a fair few need both. Knowing which is which saves you money on one end and headaches on the other.
The one-line difference
Labour hire: the agency employs the worker and places them on your site. They work under your direction, but they're never on your books.
Recruitment: the agency finds a person and you employ them directly. Once they start, they're yours.
Everything else — cost, risk, flexibility, paperwork — follows from that single distinction.
Labour hire, in practice
You tell the provider what you need — say, ten warehouse pickers for a six-week ramp. The provider supplies workers who are their employees. You pay the provider an hourly rate. Out of that rate, the provider handles wages, superannuation, payroll tax, workers' compensation, PAYG, award rates and payslips. If you need fewer people next week, you scale down. If someone isn't the right fit, you ring the provider.
The trade you're making: you pay a margin on top of the base wage, and in return the employment risk, the admin and the flexibility all sit with the agency, not you.
That's why labour hire suits work that moves — seasonal peaks, project spikes, cover for leave, uncertain demand, or a "let's see how it goes" hire before you commit.
Recruitment, in practice
Here the agency's job is to find the person, not employ them. They source, screen and shortlist candidates for a role you're going to fill permanently (or on a fixed term). You interview, you choose, and you put the successful person on your own payroll. The agency charges a one-off placement fee, usually a percentage of the first-year salary, often with a replacement guarantee if the hire doesn't work out inside a set window.
After that, everything is yours: wages, super, leave, performance management, the lot.
Recruitment suits your core, ongoing roles — the people you want on the team for years, where fit and retention matter more than day-to-day flexibility.
Side by side
| Labour hire | Recruitment | |
|---|---|---|
| Who employs the worker | The agency | You |
| How you pay | Ongoing hourly rate (wage + on-costs + margin) | One-off placement fee |
| Who handles super, leave, workers' comp, payroll | The agency | You |
| Flexibility to scale up/down | High | Low (it's a permanent hire) |
| Best for | Seasonal, project, cover, uncertain demand | Permanent core roles |
| Speed to start | Days | Weeks |
The bridge most people miss: temp-to-perm
It's not either/or. A common — and smart — pattern is to bring someone on through labour hire first, see how they actually perform on your site, and then convert them to a permanent employee if it works out. You get a genuine trial without the risk of a direct hire that doesn't stick, and the worker gets a real shot. Good providers build for this rather than penalising you for it.
So which do you need?
Ask two questions:
- Is the work permanent, or does it move? If demand fluctuates or the role is temporary, lean labour hire. If it's a long-term seat on the team, lean recruitment.
- Do you want to carry the employment, or hand it off? If you don't want the payroll, super and workers' comp admin for this role, that's labour hire by definition.
If you're staffing a warehouse for Christmas, that's labour hire. If you're hiring an operations manager to run it for the next five years, that's recruitment. If you found your future ops manager among the Christmas casuals — that's temp-to-perm, and it's the best outcome of all.
Where Calima sits
We run both. Our labour hire side crews warehouses, container work, events and industrial sites — workers who are our employees, paid correctly and insured, placed on your site fast. Our recruitment side finds permanent people you hire directly. And because we do both, we're happy to start someone on labour hire and convert them later — we're not precious about which door you come through.
Not sure which one your situation calls for? Tell us what you're trying to solve and we'll point you at the right one — even if it's the cheaper one. If it's the money side you're weighing up, our breakdown of what casual, labour hire and permanent staff really cost does the maths.
General information only, current at the time of writing — not legal advice. Workplace and licensing laws change; confirm anything decision-critical with the relevant regulator or a qualified adviser.